As expected in our previous week’s GOLD technical analysis, price consolidation and ranged trading was seen within the 1382 and 1434 levels. Our last week’s recommendation was to short GOLD above 1434 and BUY on reversal from 1385. The BUY side of the recommendation was triggered and enabled traders to gain between +150 pips to +350 pips last week.

Based on this week’s technical analysis of the GOLD 4 hour chart, we expect price to further consolidate in the range between 1382 to 1434 range before any significant direction is seen.

Further narrowing of the range may be possible if the 20 Day MA provides support at 1400 levels and price is resisted at the trend line currently at 1420 level (shown in red). Price reversals at these levels may be used by aggressive traders to make a quick trades.

The risk:reward of trades based on such interim ranged trades are not attractive and we recommend waiting for price to reach the major support and resistance zones for taking positions with good risk:reward ratios.

With the FED rate cut of 25 bp fully priced in, GOLD may need further dovish statements to test or break the strong resistance being formed above 1434.